University Car Wash built a deluxe car wash across the street from campus. The new machines cost $258,000 including installation. The company estimates that the equipment will have a residual value of $28,500. University Car Wash also estimates it will use the machine for six years or about 12,500 total hours. Actual use per year was as follows: 1) Year 2. 1 2 3 4 5 6 Prepare a depreciation schedule for six years using the straight-line method. (Do not round your intermediate calculations. Round your answers to the nearest dollar amount.) Prepare a depreciation schedule for six years using the double-declining-balance method. (Do not round your intermediate calculations. Round your answers to the nearest dollar amount.) 3) Prepare a depreciation schedule for six years using the activity-based method. (Round your "Depreciation Rate" to 2 decimal places and use this amount in all subsequent calculations.) Hours Used 2,700 1,500 1,600 2,400 2,200 2,100

University Car Wash built a deluxe car wash across the street from campus. The new machines cost $258,000 including installation. The company estimates that the equipment will have a residual value of $28,500. University Car Wash also estimates it will use the machine for six years or about 12,500 total hours. Actual use per year was as follows: 1) Year 2. 1 2 3 4 5 6 Prepare a depreciation schedule for six years using the straight-line method. (Do not round your intermediate calculations. Round your answers to the nearest dollar amount.) Prepare a depreciation schedule for six years using the double-declining-balance method. (Do not round your intermediate calculations. Round your answers to the nearest dollar amount.) 3) Prepare a depreciation schedule for six years using the activity-based method. (Round your "Depreciation Rate" to 2 decimal places and use this amount in all subsequent calculations.) Hours Used 2,700 1,500 1,600 2,400 2,200 2,100

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 4EA: Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is...

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University Car Wash built a deluxe car wash across the street from campus. The new
machines cost $258,000 including installation. The company estimates that the equipment
will have a residual value of $28,500. University Car Wash also estimates it will use the
machine for six years or about 12,500 total hours. Actual use per year was as follows:
1)
Year
1
2
3
4
5
6
Prepare a depreciation schedule for six years using the straight-line method. (Do not round your intermediate
calculations. Round your answers to the nearest dollar amount.)
Prepare a depreciation schedule for six years using the double-declining-balance
method. (Do not round your intermediate calculations. Round your answers to the
nearest dollar amount.)
3) Prepare a depreciation schedule for six years using the activity-based method. (Round
your "Depreciation Rate" to 2 decimal places and use this amount in all subsequent
calculations.)
Hours
Used
2,700
1,500
1,600
2,400
2,200
2,100

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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation

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Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montello uses the straight-line depreciation method. Calculate the annual depreciation expense.
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